• Published 2003

Modeling the Whole Firm : The Effect of Multiple Inputs and Financial Intermediation on Bank Deposit Rates

@inproceedings{Adams2003ModelingTW,
  title={Modeling the Whole Firm : The Effect of Multiple Inputs and Financial Intermediation on Bank Deposit Rates},
  author={Bob Adams and Allen N. Berger and Ken Brevoort},
  year={2003}
}
Empirical studies of price competition typically analyze the direct effects of market structure, cost, and local demand on prices; this approach has been applied widely to studies of bank deposit rates. However, the theory of the banking firm suggests that substitutability between sources of deposits and conditions in the bank loan market should also affect the pricing of retail deposits. This paper develops a theoretical model to incorporate these effects, and tests the predictions empirically… CONTINUE READING

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